Outdated regulations that force companies to build and maintain obsolete copper-based legacy telephone networks are unnecessarily diverting investment away from modern broadband networks and services that 95 percent of U.S. households prefer, desire and use, says a new study released on According to a release, policy scholar and communications industry analyst Dr.
In addition, IIA noted:
The report finds that the overwhelming majority of U.S. consumers have a plethora of choices to meet their voice, video, and Internet- access communications needs. They rely on the use of smart wireless devices, cellphones, wired Internet-enabled VoIP services, and over- the-top Internet-enabled applications (i.e.
These choices are available over different platforms -- wireline, cable, wireless, and satellite -- that compete on the basis of different economics and different technical characteristics. Those differences enable these platforms to innovate to satisfy a variety of consumer needs, to serve different customer segments, and to make their competition sustainable.
The study notes that 99 percent of all U.S. communications traffic is now carried over these platforms in Internet Protocol, while legacy circuit-switched traffic is now less than 1 percent of traffic and likely to further decrease to a small fraction of 1 percent by 2017.
The study notes that at year-end 2012, 38 percent of Americans relied on wireless exclusively, 4 percent relied on VoIP exclusively and only 5 percent relied on traditional plain-old-telephony (POTS) exclusively. Another 53 percent relied on wireless in combination with either POTS (29 percent) or VoIP (24 percent).
Although only 5 percent of households rely exclusively on traditional circuit-switched POTS, and only 1 percent of U.S. traffic is circuit-switched, regulators still require incumbent phone companies to maintain their legacy networks even where they upgrade to IP over fiber-fed infrastructure. By contrast, cable and wireless networks are free to upgrade their infrastructure without such constraints.
"Regulation, however well-intended, changes too slowly for the fast-moving digital world. It distorts the market and hinders innovation," Dr. Kovacs said.
Where incumbent telephone companies invest in IP over fiber-fed infrastructure they are gaining share against cable companies' Internet-access and video, even as they lose subscribers where they are still providing legacy services such as POTS and low-speed DSL.
"In addition to the powerful competitive pressure that wireless places on other communications providers, it is important that the cable companies and phone companies continue to compete effectively with each other. That requires the
Overwhelming Consumer Use of Broadband Demands Full Technology Transition
"If federal and state policymakers want to continue to foster a world-leading, highly competitive communications market in America that is responsive to consumers' needs and preferences, they must modernize policies and create a level playing field for all competitors to invest and innovate," said
To illustrate how the current regulatory framework is slowing investment in broadband infrastructure, one need only look at the incumbent telephone companies' capital expenditures during the 2006 through 2011 period. Dr. Kovacs estimates that the incumbents spent a total of
Dr. Kovacs states that consumer protections and access to reliable 911 emergency services must remain available for broadband communications services; however regulators should acknowledge the reality that a majority of consumers today rely heavily on multiple IP-enabled wireless and wired network infrastructures and means of communications.
In addition to the study's findings on consumer trends and the impact of investment on communications networks, it discusses the Google-Fiber Model; the impact of the 1996 Telecommunications Act; the failure of mandated network-sharing; and the success of inter- platform competition and over-the-top services.
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Outdated regulations that force companies to build and maintain obsolete copper-based legacy telephone networks are unnecessarily diverting investment away from modern broadband networks and services that 95 percent of U.S. households prefer, desire and use, says a new study released on
According to a release, policy scholar and communications industry analyst Dr.